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Negative Divergences Often Warn of Declines: Bitcoin & Gold Negative Divergences Often Warn of Impending Declines: Bitcoin Highlighted…. Is Gold Next? OTC:GBTC COMEX:GC1! INDEX:BTCUSD The CMT Association is proud to publish this guest post from Louise Yamada CMT. Louise was a Managing Director and Head of Technical Research for Smith Barney (Citigroup), and while there, was a perennial leader in the Institutional Investor poll and the top-ranked market technician in 2001, 2002, 2003 and 2004. Louise was the 2016 recipient of the CMT Association’s Lifetime Achievement Award. In these examples we use the moving average convergence divergence (MACD) indicator to illustrate the concept of divergence, to forensically evaluate Bitcoin and to make some forward looking observations on the gold market. Divergences: • Negative momentum divergences often warn of impending price consolidations or declines. • Divergence forms as price moves to a new high while the oscillator fails at a lower high, creating a negative divergence between the oscillator and price. • Divergences of this type suggest that the underlying momentum may be waning. Divergences carry different implications depending upon their time frame. • Daily perspective divergences suggest either a consolidation, or a pullback in an ongoing uptrend. • Weekly perspective divergences suggest a more sustained consolidation or even a reversal of trend, particularly if important support is violated. • Monthly divergences have the potential to result in a more sustained decline or even to reverse an uptrend. MACD sell signals give validity to divergences. • Monthly signals have much more weight than weekly and daily. • Monthly divergences don’t always occur prior to monthly MACD sell signals • But when a sell signal does occur it offers a structural warning. Graystone Bitcoin Trust (GBTC) Weekly: • The March 2021 high (A) was followed by a roughly equal price high (B). However, the MACD momentum peaked at a significantly lower high (Line A1-B1), forming a classic divergence that suggested that upward momentum was fading. • At point C, the weekly MACD moved onto a sell signal (the fast moving average crossed below the slower moving average) strongly suggesting that positions should be either lightened or sold. • After the sell signal was generated, price declined from 50 to 24. • A weekly MACD buy signal was then generated at point D. The subsequent rally carried price near the prior high. • The failure of the MACD to match its prior high warned of potential weakness. • The MACD generated another sell signal at point E, suggesting lightening or selling positions. Price offered another decline from 50 to 24. • After a multi-week consolidation in March-April 2022, price broke below the support @24 (S1-S2). • MACD continues to decline, suggesting that the price decline may not be over, notwithstanding interim rallies. • Before considering a new long, evidence of stabilization at a low and the gradual reversal of the daily, weekly and eventually, monthly MACDs would be required. Grayscale Bitcoin Trust (GBTC) Daily • On the daily perspective chart that there is a divergence from price (A-B) and the MACD (C-D) • The divergence warned of the possibility of bearish developments spreading to the weekly and monthly. Graystone Bitcoin Trust (GBTC) Monthly: • The monthly chart also shows a divergence at points MD1 and MD2 and on the histogram at MD3 and MD4. • At the second price high (B), MACD hadn’t yet generated a sell signal, but it was beginning to flatten and roll over. • One can also see the falling histogram, as the MACD narrows (blue arrow), and the divergence progressed, until it finally generated a clear sell. • Price lingered above the support at 24 (S2) for several months providing ample time to adjust positions before the May 2022 price breakdown. Momentum is still declining, suggesting that it’s too soon to consider re-entry, notwithstanding interim rallies, which can carry into resistance, formerly support. Graystone Bitcoin Trust (GBTC) relative to SPX Weekly: • One can also note a similar warning in the weekly Relative Strength (RS) negative divergence. • In this case the RS for BITCOIN/SPX was also suggesting a change from a period of relative overperformance to one of relative underperformance. Is Gold Next? Gold is displaying many of the same long term MACD warning behaviors evident in the GBTC chart. COMEX Gold Daily: • Despite the May 2020 (R1) and 2022 (R2) price peaks being roughly equal, the MACD (R3 & R4) peaked at a much lower level. • A MACD Sell signal occurred after the 2020 peak (R3), alerting to the possible price decline, which eventually carried to the March 2021 low near 1,700 (S1). • The lower March 2022 MACD peak (R4) also registered a sell signal, suggesting one might lighten positions. COMEX Gold Monthly: • There is a monthly multi-year MACD negative divergence between the 2012 (R1) and 2022 (R2) price peaks. • In 2012, the monthly MACD structural sell signal (R3) was very effective as price collapsed toward 1,100 on the sell signal. • In March 2022, the MACD, registered another major monthly sell (R4), and then subsequently rallied to test the high (R2) without generating a new buy signal (A), a sign of weakness. • The MACD has remained negative and appears poised to perhaps continue down. • This suggests that Gold may be in danger of a potentially large decline, especially if support at 1,700 is broken. • Such a breach could easily find support at the breakout level from the 2013 to 2019 basing pattern at 1400. • It is possible, however, that although GOLD has broken out in many other currencies, the extraordinary current strength in the US dollar may be contributing to the Gold disappointment. Louise Yamada CMT LYAdvisors LLC
GEducation
by CMT_Association
75
BTC to GOLD ratio shows bottom could be close !This ratio has proven to be effective at least 4 times since the secular Bitcoin bull market has started: JAN 2015 - AUG 2015 - DEC 2018 - MAR 2020 Will it show the way in JUN 2022 ? Odds favour it might be so ! Either the ratio touched the 7 year ascending trendline (JAN 2015 - AUG 2015 - MAR 2020) Or the RSI of the ratio reached deeply oversold levels (DEC 2018) In JUN 2022 we will have both (ratio touting the trendline AND RSI reaching very oversold levels) ! Moreover the ratio will touch the previous ATH of DEC 2017 (indicated by the light blue horizontal line). This had already happened in AUG 2016 when the ATH in the ratio functioned as support. Please note the light blue arrow !! So now we have 3 indicators converging !! In JUN 2022 we will have ratio support line, RSI at around 30 and the previous ATH giving support ! PERSONALLY I think we will hold these levels ! * Shout out to Christopher Aron for showing me the important BTC GOLD ratio 7 year trendline !!
CRYPTOCAP:BTCLong
by Dangermousebanana
2
Forget about USD how does Bitcoin compare to GOLDWe all know that inflation is here. So let's take that out of the equation. Here is a comparison of Gold to Bitcoin based on the Bull and Bear runs on BTC. Back in 2018 Bull Market you could buy ~8oz of Gold for 1 Bitcoin In 2019 Bear Market you could only buy ~3oz of Gold for 1 Bitcoin In 2021 Bull Market you could buy ~32oz of Gold for 1 Bitcoin Today Bear Market you can only buy ~16oz of Gold for 1 Bitcoin @PeterSchiff what do you think? @APompliano what do you think?
BITSTAMP:BTCUSDLong
by controllinghand
Bitcoin / Gold (BLX/XAU) Chart - 50/200 MA Death Cross nearingOn the Bitcoin / Gold chart a warning signal flashed on April 16th! We are nearing a 50/200 MA DEATH CROSS which will occur on May 4th on the 3-day chart! 50/200 MA death cross are quite rare, especially on the 3-day chart. The Bitcoin price drops on average approximately 50% (measured from the day the warning signal of the death cross indicator flashes - to the bottom)! Disclaimer! We (Asset-Ethology) are not a financial adviser. For educational purpose only! You can use the information from the post to make your own trading decisions. Trading is risky, and it is not suitable for everyone. Only you can be responsible for your trading.
BNC:BLXShort
by Asset-Ethology
ETH/USDT Where to long? 22.3.19ETH has broken the 2800-2850 resistance. If Pullback returns to this area and observes the Candlestick pattern, he can enter the long position Friends, please note that to enter the long position, it is necessary to see the candlestick pattern ⚠️ This Analysis will be updated ... 👤 Sadegh Ahmadi: @SDQ_Crypto 📅 19.Mar.22 ⚠️(DYOR) ❤️ If you apperciate my work , Please LIKE and COMMENT , It Keeps me motivated to do better❤️
Long
by GPTradersHub
2